Wednesday started off with a surprise to the upside as retail numbers in January jumped even more than economists were expecting, according to the latest data from the Census Bureau.
- M-O-M: Advance estimates of U.S. retail and food services sales for January jumped 3.0% to $697.0 billion, this is up big from December’s 1.1% decline and is the biggest jump since January 2022.
- Y-O-Y: Retail sales were up 6.4% when compared to the same time last year.
Beat The Street. January’s report blew expectations out of the water as economists projected a 1.6% increase from December.
Lunch & Shopping Is Back. Department stores came roaring back to start 2023 with a 17.5% increase from December followed by Restaurants & Bars (7.2%) and auto dealers (+6.4%).
- Year-over-year Restaurants and bars were by far the biggest gainer with a 25.2% jump from January 2022 followed by sporting goods stores (6.9%) and clothing stores (+6.3%)
One Red. Not one category was in the red from December and only one category was in the red year-over-year which was electronic stores which fell 6.3% despite a 3.5% increase in January.
Home Builder Confidence Reports Biggest Jump In 2001
Homebuilder confidence reported the biggest jump in over twenty years, according to the National Association of Home Builders.
- M-O-M: the National Association of Home Builders/Wells Fargo Housing Market Index jumped 7 points to 42 in February. This is the highest reading since September and was the biggest increase since December 2001.
- Y-O-Y: Despite the big increase, homebuilder confidence is still down 41 points from the same time last year.
Beat The Street. Economists were projecting a smaller increase to 37 in February.
Future Is Bright. For the first time since the pandemic, confidence in the future surpassed current confidence. Single-family sales in the next six months reported an eleven-point jump to 48 which just overtook current confidence in single-family sales which jumped six points to 46 in February.
- The traffic of prospective buyers was up six points to 29.
Northeast Takes the Top Spot. For the first time since October, the Northeast builders were the most confident after a twelve-point jump to 47 February. The South was close behind after a six-point increase to 45 followed by the West at 27 (+8) and the midwest at 36 (+4).
Analysis. Robert Dietz, chief economist for NAHB, noted that falling rates can have quite an impact on buyer demand. “With the largest monthly increase for builder sentiment since June 2013 (excluding the period immediately after the onset of the pandemic), the HMI indicates that incremental gains for housing affordability have the ability to price-in buyers to the market. The nation continues to face a sizeable housing shortage that can only be closed by building more affordable, attainable housing.”